Preheat your oven to 350°F (175°C). Grease a 2-quart baking dish with butter or cooking spray.
In a large pot, bring water to a boil. Add the sliced squash and chopped onion. Cook for about 5 minutes until slightly tender. Drain and let cool.
In a large mixing bowl, combine the cooked squash and onion, shredded cheddar cheese, crushed crackers, milk, eggs, melted butter, salt, black pepper, garlic powder, and onion powder. Mix well until all ingredients are evenly combined.
Pour the mixture into the prepared baking dish and spread it out evenly.
Bake in the preheated oven for 30-35 minutes, or until the top is golden brown and the casserole is set.
Let the casserole cool for about 5 minutes before serving.